EXHIBIT 10.2
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FRANKLIN RESOURCES, INC.
2002 UNIVERSAL STOCK INCENTIVE PLAN
RESTRICTED STOCK UNIT AWARD AGREEMENT
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This Restricted Stock Unit Award Agreement (this "Agreement") is made as of the
Award Date set forth in the Notice of Restricted Stock Unit Award (the "Notice
of Award") between Franklin Resources, Inc. (the "Company") and the Participant
named therein ("Participant").
WITNESSETH:
WHEREAS, the Board of Directors of the Company has adopted the Franklin
Resources, Inc. 2002 Universal Stock Incentive Plan (the "2002 Plan"),
authorizing the grant of Restricted Stock Units ("Units") to eligible
individuals in connection with the performance of services for the Company and
its Subsidiaries, as defined in said 2002 Plan, which is incorporated herein by
this reference (capitalized terms used but not defined in this Agreement have
the meaning set forth in the 2002 Plan); and
WHEREAS, the Company recognizes the efforts of Participant on behalf of the
Company and its Subsidiaries and desires to motivate Participant in
Participant's work and provide an inducement to remain in the service of the
Company and its Subsidiaries; and
WHEREAS, the Company has determined that it would be to the advantage and
in the interest of the Company and its shareholders to award the Units provided
for in this Agreement to Participant (the "Award"), subject to restrictions, as
a reward and an incentive for increased efforts and successful achievements;
NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual covenants herein contained, the parties hereto hereby agree as follows:
1. RESTRICTED STOCK UNIT AWARD. The Company is issuing to Participant Units
as set forth in the Notice of Award, subject to the rights of and limitations on
Participant as owner thereof as set forth in this Agreement.
2. TRANSFER RESTRICTION.
(a) The Units may not be transferred in any manner other than by will or by
the laws of descent and distribution. Notwithstanding the foregoing, Participant
may designate a beneficiary of the Units in the event of Participant's death on
the beneficiary designation form included in the Notice of Award. The terms of
this Agreement shall be binding upon the executors, administrators, heirs,
successors and transferees of Participant.
(b) Participant acknowledges that, from time to time, the Company may be in
a "Blackout Period" and/or subject to applicable securities laws that could
subject the Participant to liability for engaging in any transaction involving
the sale of the Company's shares. Participant further acknowledges and agrees
that, prior to the sale of any shares acquired under this Award, it is
Participant's responsibility to determine whether or not such sale of shares
will subject Participant to liability under insider trading rules or other
applicable securities laws.
3. VESTING.
(a) The Units shall become vested in accordance with the Vesting Schedule
in the Notice of Award so long as Participant maintains Continuous Status as an
Employee of the Company or a Subsidiary.
(b) If Participant ceases to maintain Continuous Status as an Employee of
the Company or any of its Subsidiaries for any reason other than death or
disability (as described in subparagraph (c)), all Units to the extent not yet
vested under subparagraph (a) on the date Participant ceases to be a full-time
employee shall be forfeited by Participant without payment of any consideration
to Participant therefor. Any Units so forfeited shall be canceled and returned
to the status of authorized but unissued shares, to be held for future
distributions by the Company's 2002 Plan.
(c) If Participant dies or in the event of termination of Participant's
Continuous Status as an Employee as a result of disability (as determined by the
Board in accordance with the policies of the Company) while a full-time employee
of the Company or any of its Subsidiaries, the Units awarded hereunder shall
become fully vested as of the date of death or termination of employment on
account of such disability. Unless changed by the Board, "disability" means that
Participant ceases to be an employee on account of permanent and total
disability as a result of which Participant shall be eligible for payments under
the Company's long term disability policy.
4. CONVERSION OF UNITS AND ISSUANCE OF SHARES. Upon each vesting date, one
share of Common Stock shall be issuable for each Unit that vests on such date
(the "Stock"), subject to the terms and provisions of the 2002 Plan and this
Agreement. Thereafter, the Company will transfer such Shares to Participant upon
satisfaction of any required tax or other withholding obligations. Any
fractional Unit remaining after the Award is fully vested shall be discarded and
shall not be converted into a fractional share of Stock.
5. RIGHT TO SHARES. Participant shall not have any right in, to or with
respect to any of the shares of Stock (including any voting rights or rights
with respect to dividends paid on the Common Stock) issuable under the Award
until the Award is settled by the issuance of such shares of Stock to
Participant.
6. WITHHOLDING OF TAXES.
(a) GENERAL. Participant is ultimately liable and responsible for all taxes
owed by Participant in connection with the Units awarded, regardless of any
action the Company or any of its Subsidiaries takes with respect to any tax
withholding obligations that arise in connection with the Units awarded. Neither
the Company nor any of its Subsidiaries makes any representation or undertaking
regarding the treatment of any tax withholding in connection with the grant or
vesting of the Units awarded or the subsequent sale of any of the shares of
Stock. The Company and its Subsidiaries do not commit and are under no
obligation to structure the Award to reduce or eliminate Participant's tax
liability.
(b) PAYMENT OF WITHHOLDING TAXES. Prior to any event in connection with the
Units awarded (e.g., vesting) that the Company determines may result in any tax
withholding obligation, whether United States federal, state, local or non-U.S.,
including any employment tax obligation (the "Tax Withholding Obligation"),
Participant must arrange for the satisfaction of the minimum amount of such Tax
Withholding Obligation in a manner acceptable to the Company.
(i) BY SHARE WITHHOLDING. Unless Participant determines to satisfy the
Tax Withholding Obligation by some other means in accordance with clause (iii)
below, Participant authorizes the Company (in the exercise of its sole
discretion) to withhold from those shares of Stock
issuable to Participant the whole number of shares sufficient to satisfy the
minimum applicable Tax Withholding Obligation. Participant acknowledges that the
withheld shares may not be sufficient to satisfy Participant's minimum Tax
Withholding Obligation. Accordingly, Participant agrees to pay to the Company or
any of its Subsidiaries as soon as practicable, including through additional
payroll withholding, any amount of the Tax Withholding Obligation that is not
satisfied by the withholding of shares described above. Share withholding will
generally be used to satisfy the minimum Tax Withholding Obligation of
individuals subject to the short-swing profit restrictions of Section 16(b) of
the Securities Exchange Act of 1934, as amended.
(ii) BY SALE OF SHARES. Unless Participant determines to satisfy the
Tax Withholding Obligation by some other means in accordance with clause (iii)
below, Participant's acceptance of the Award constitutes Participant's
instruction and authorization to the Company and any brokerage firm determined
acceptable to the Company for such purpose to sell on Participant's behalf a
whole number of shares from those shares of Stock issuable to Participant as the
Company determines to be appropriate to generate cash proceeds sufficient to
satisfy the minimum applicable Tax Withholding Obligation. Such shares will be
sold on the day such Tax Withholding Obligation arises (e.g., a vesting date) or
as soon thereafter as practicable. Participant will be responsible for all
broker's fees and other costs of sale, and Participant agrees to indemnify and
hold the Company harmless from any losses, costs, damages, or expenses relating
to any such sale. To the extent the proceeds of such sale exceed Participant's
minimum Tax Withholding Obligation, the Company agrees to pay such excess in
cash to Participant. Participant acknowledges that the Company or its designee
is under no obligation to arrange for such sale at any particular price, and
that the proceeds of any such sale may not be sufficient to satisfy
Participant's minimum Tax Withholding Obligation. Accordingly, Participant
agrees to pay to the Company or any of its Subsidiaries as soon as practicable,
including through additional payroll withholding, any amount of the minimum Tax
Withholding Obligation that is not satisfied by the sale of shares described
above.
(iii) BY CHECK, WIRE TRANSFER OR OTHER MEANS. At any time not less
than five (5) business days (or such fewer number of days as determined by the
Committee or its designee) before any Tax Withholding Obligation arises (e.g., a
vesting date), Participant may elect to satisfy Participant's minimum Tax
Withholding Obligation by delivering to the Company an amount that the Company
determines is sufficient to satisfy the minimum Tax Withholding Obligation by
(x) wire transfer to such account as the Company may direct, (y) delivery of a
certified check payable to the Company, or (z) such other means as specified
from time to time by the Committee or its designee.
5. SUCCESSORS. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, successors and assigns. Nothing contained in the 2002 Plan or
this Agreement shall be interpreted as imposing any liability on the Company or
the Committee in favor of any Participant or any purchaser or other transferee
of Stock with respect to any loss, cost or expense which such Participant or
purchaser may incur in connection with, or arising out of any transaction
involving any shares of Stock subject to the 2002 Plan or this Agreement.
6. INTEGRATION. The terms of the 2002 Plan and this Agreement are intended
by the Company and Participant to be the final expression of their agreement
with respect to the Units and may not be contradicted by evidence of any prior
or contemporaneous agreement. The Company and Participant further intend that
the 2002 Plan and this Agreement shall constitute the complete and exclusive
statement of their terms and that no extrinsic evidence whatsoever may be
introduced in any arbitration, judicial, administrative or other legal
proceeding involving the 2002 Plan or this Agreement. Accordingly, the 2002 Plan
and this Agreement contain the entire understanding between the parties and
supersede all prior oral, written and implied agreements, understandings,
commitments and practices among the parties.
7. WAIVERS. Any failure to enforce any terms or conditions of the 2002 Plan
or this Agreement by the Company or by Participant shall not be deemed a waiver
of that term or condition, nor shall any waiver or relinquishment of any right
or power for all or any other times.
8. SEVERABILITY OF PROVISIONS. If any provision of the 2002 Plan or this
Agreement shall be held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provision thereof; and the 2002 Plan
and this Agreement shall be construed and enforced as if neither of them
included such provision.
9. COMMITTEE DECISIONS CONCLUSIVE. All decisions of the Committee arising
under the 2002 Plan or under this Agreement shall be conclusive.
10. MANDATORY ARBITRATION. To the extent permitted by law, any dispute
arising out of or relating to this Agreement, including its meaning or
interpretation, shall be resolved solely by arbitration before an arbitrator
selected in accordance with the rules of the American Arbitration Association.
The location for the arbitration shall be in the county or comparable
jurisdiction of Participant's employment. Judgment on the award rendered may be
entered in any court having jurisdiction. Each party shall pay an equal share of
the arbitrator's fees. All statutes of limitation which would otherwise be
applicable shall apply to any arbitration proceeding under this paragraph. The
provisions of this paragraph are intended by Participant and Company to be
exclusive for all purposes and applicable to any and all disputes arising out of
or relating to this Agreement. The arbitrator who hears and decides any dispute
shall have jurisdiction and authority only to award compensatory damages to make
whole a person or entity sustaining foreseeable economic damages, and, shall not
have jurisdiction and authority to make any other award of any type, including
without limitation, punitive damages, unforeseeable economic damage, damages for
pain, suffering or emotional distress, or any other kind or form of damages. The
remedy, if any, awarded by the arbitrator shall be the sole and exclusive remedy
for any dispute which is subject to arbitration under this paragraph.
11. DELAWARE LAW. The 2002 Plan, the Notice of Award and this Agreement
shall be construed and enforced according to the laws of the State of Delaware
to the extent not preempted by the federal laws of the United States of America.
FRANKLIN RESOURCES, INC.
2002 UNIVERSAL STOCK INCENTIVE PLAN
NOTICE OF RESTRICTED STOCK UNIT AWARD
Participant's Name:
Address:
Franklin Resources, Inc. (the "Company") recognizes your efforts and
contributions on behalf of the Company and its Subsidiaries and, as a reward and
an incentive for increased efforts and successful achievements, has awarded you
Restricted Stock Units as described in the Restricted Stock Unit Award Agreement
(the "Award Agreement") and this Notice of Restricted Stock Unit Award
(collectively, the "Award") as follows:
Award Number ______________________________________
Award Date ______________________________________
Total Number of Restricted Stock
Units Awarded (the "Units") ______________________________________
VESTING SCHEDULE
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Subject to the Participant's continued employment with the Company and
other limitations set forth in the Award, the Award Agreement and the 2002 Plan,
the Shares /1/ shall vest in accordance with the following schedule:
One Hundred Percent (100%) of the Shares shall vest on September 28, 2007
unless subject to earlier vesting as provided for below. An accelerated vesting
of the Shares will occur as described below if either or both of the following
performance goals are achieved:
One-third of the number of Shares granted pursuant to this Award (rounded
upwards to the next highest whole number of Shares) (the "First Vesting Shares")
shall vest (the "2005 Fiscal Year Operating Income Goal") if Operating Income
(as defined below) for the fiscal year of the Company ending September 30, 2005
(the "2005 Fiscal Year") is at least 15% greater than Operating Income (as
defined below) for the fiscal year of the Company ended September 30, 2004 (the
"2004 Fiscal Year"). This accelerated vesting, if any, will be effective on the
later of December 15, 2005 or ten (10) business days after the release of the
annual financial statements included in the Company's Annual Report on Form 10-K
for the 2005 Fiscal Year (the "First Vesting Date"). If the 2005 Fiscal Year
Operating Income Goal is not met by the First Vesting Date, there shall be no
acceleration of the vesting of the First Vesting Shares, even if the 2005 Fiscal
Year Operating Income Goal is later achieved and such shares shall vest in
accordance with their terms on September 28, 2007.
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/1/ "Shares" will be replaced with "Units" in the Vesting Schedule applicable to
Units issued pursuant to these resolutions.
One-third of the number of Shares granted pursuant to this Award (rounded
upwards to the next highest whole number of Shares (the "Second Vesting Shares")
shall vest (the "2006 Fiscal Year Operating Income Goal") if Operating Income
(as defined below) for the fiscal year of the Company ending September 30, 2006
(the "2006 Fiscal Year") is at least 32.25% greater than Operating Income (as
defined below) for the 2004 Fiscal Year. This accelerated vesting, if any, will
be effective on the later of December 15, 2006 or ten (10) business days after
the release of the annual financial statements included in the Company's Annual
Report on Form 10-K for the 2006 Fiscal Year (the "Second Vesting Date"). If the
2006 Fiscal Year Operating Income Goal is not met by the Second Vesting Date,
there shall be no acceleration of the vesting of the Second Vesting Shares, even
if the 2006 Fiscal Year Operating Income Goal is later achieved and such shares
shall vest in accordance with their terms on September 28, 2007.
"Operating Income" with respect to any fiscal year is defined as total
operating revenues less total operating expenses determined on a consolidated
basis reported in the annual financial statements included in the Company's
Annual Report on Form 10-K for such fiscal year.
Participant acknowledges and agrees that the Units subject to this Award
shall vest only by Participant continuing employment at the will of the Company
(not through the act of being hired, being granted this Award or acquiring
shares hereunder). Participant further acknowledges and agrees that nothing in
this Award nor in the Company's 2002 Universal Stock Incentive Plan (the "2002
Plan"), which is incorporated herein by this reference, affects the Company's
right to terminate, or to change the terms of, the Participant's employment at
any time, with or without cause.
Participant acknowledges that, from time to time, the Company may be in a
"Blackout Period" and/or subject to applicable securities laws that could
subject the Participant to liability for engaging in any transaction involving
the sale of the Company's shares. Participant further acknowledges and agrees
that, prior to the sale of any shares acquired under this Award, it is
Participant's responsibility to determine whether or not such sale of shares
will subject Participant to liability under insider trading rules or other
applicable securities laws.
Participant understands that the Award is subject to Participant's consent
to access the 2002 Plan prospectus, the 2002 Plan, the Award Agreement
(collectively, the "2002 Plan Documents") in electronic form through the People
Page on the Company's Intranet. By signing below and accepting the grant of the
Award, you: (i) consent to access electronic copies (instead of receiving paper
copies) of the 2002 Plan Documents via the Company's Intranet; (ii) represent
that you have access to the Company's Intranet; (iii) acknowledge receipt of
electronic copies, or that you are already in possession of paper copies, of the
2002 Plan Documents and the Company's [2003] Annual Report; and (iv) acknowledge
that you are familiar with and accept the Award subject to the terms and
provisions of the 2002 Plan Documents.
Participant may receive paper copies of the 2002 Plan Documents by
requesting them in writing addressed to Stock Administration at One Franklin
Parkway, San Mateo, CA 94403-1906.
In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due to me pursuant to this
Award. Please note that this designation applies only to this Award and not to
any prior awards or grants under the 2002 Plan.
NAME: (Please print):___________________________________________
(First) (Middle) (Last)
SSN/SIN/National Tax ID:________________________________________
ADDRESS: ___________________________________________
___________________________________________
(Please include Country and Zip/Postal Code)
TELEPHONE NO.: ___________________________________________
(Please include country and/or area code)
RELATIONSHIP: ___________________________________________
PERCENTAGE: ___________________________________________
(Enter the % you wish your beneficiary(ies)
to receive)
By your electronic signature and by the acceptance of the Company's
representative below, you and the Company agree that the Award is granted under
and governed by the terms and conditions of the 2002 Plan and the Award
Agreement.
PARTICIPANT: FRANKLIN RESOURCES, INC.
________________________________________ __________________________________
Participant's Name Barbara J. Green, Vice President